KiwiRail employees have been told there will be between 40 and 45 redundancies in Dunedin.
No announcement been made so far on a further 30 redundancies the union expects at KiwiRail's Upper Hutt workshop.
The Rail and Maritime Union is appalled by the decision and says KiwiRail is rubbing salt into the wound by announcing the job cuts on the same day as foreign-made rail wagons arrive in New Zealand.
The union says the redundancies at the Hillside workshop could be avoided if it built the electric trains and 300 wagons locally rather than buying them from China.
But KiwiRail says it would cost about $36 million to build the wagons in New Zealand compared with $29 million to buy them from China.
Chief executive Jim Quinn says he is aware the redundancies are distressing for staff and the arrival of the Chinese wagons on the same day as the announcement is an unfortunate coincidence.
Some 172 people are employed at the Hillside workshop.